3 ways AI is simplifying benefits administration

Artificial intelligence is changing the game for benefit leaders, improving the benefit selection and delivery process, while simplifying common pain points, too.

Eighty-one percent of benefit leaders say they have explored or already implemented AI to improve benefit administration efficiency, according to human capital software company UKG. To understand where that technology is having the greatest impact, a recent study from the ERISA Industry Committee (ERIC) highlights the three areas where AI is most widely being put to use and how it's delivering value for both benefit leaders and employees.

"Most benefit leaders aren't using AI to redesign benefits from scratch," says Kirat Kharode, co-founder of benefit administration platform HealCo. "They're using it to remove friction from systems that already exist and finally make them usable for employees."

Simplifying onboarding

During the onboarding process, AI is supporting new employees by simplifying benefit decisions, ensuring they're signed up quickly and can engage in their options, according to ERIC's study. It also assists with health plan selections and avoids enrollment gaps by explaining options and helping new hires designate retirement beneficiaries. From a financial wellness standpoint, AI integrations can also check payroll setups for missing tax forms or direct deposit details, as well as help employees understand tuition assistance and other educational benefits early on.

By introducing AI early in the employment process, leaders are reducing confusion, minimizing the back-and-forth with HR teams and making employees feel more confident in their decisions, as well as setting themselves up for success.

"The biggest win here isn't even cost — it's utilization," Kharode says. "Employees end up actually using [the benefits] employers are already paying for."

Improving employee growth, retention and experience

ERIC's research found that AI is being used to provide ongoing benefit guidance, personalization and proactive insights as employees age. For example, AI can T answer questions about leave policies, accruals and eligibility. It can promote learning opportunities like webinars or tutorials, depending on tenure and role. Furthermore, AI identifies patterns in healthcare benefits usage to inform employees about options that better fit their needs.

Overall, AI can help benefit leaders recognize employee progress — and outstanding gaps — so they can personalize their outreach moving forward.

"AI isn't just answering questions, it's spotting problems earlier," Kharode says. "Leaders are identifying issues before they turn into ER visits, avoidable admissions or medication missteps. That's where better benefits actually show up as better outcomes and lower downstream cost." 

Making offboarding easy

Finally, although offboarding marks the end of an employee's tenure, it remains an important milestone in the benefits lifecycle that benefits leaders should take seriously. At this stage, AI is being used to provide employees with critical health benefits information, according to the ERIC report, as well as to identify the value of unused leave, mitigate wage compliance risks, and support potential benefit rollovers. This helps employees make more informed financial decisions as they transition out of the organization.

As AI's use cases in the workplace continue to develop, its role in the benefit administration process will only grow, according to Kharode, but he urges leaders to embrace the technology's potential. 

"The important thing to understand is that AI doesn't replace human decision-making in benefits — it restores it," Kharode says. "When routine questions, navigation and administrative noise are handled by software, benefits teams and clinicians can focus on what matters."